J.C. Penney (JCP) has had a rough few months (or years), but a new plan rumored to be in the works that would enable the company to lease space in its top stores to other brands apparently looks appealing to some investors. The move would transform the department store into a “real estate investment trust (REIT)-like entity,” explained an ISI Group analyst who suggested that the company could form a separate REIT that could be valued at about $40 per share. The analyst also listed Ugg, H&M, and Calvin Klein as brands and merchants that might lease space[1]. For now, however, the REIT rumor is just that: a rumor. Many J.C. Penney landlord agreements prohibit subleasing, so the kinks would definitely have to be worked out of the system.

Nevertheless, JCP investors are clearly ready to pounce on any source of hope. Stocks rose in the wake of the rumor from $15.48 on Friday (dangerously near the stock’s 52-month low) to XX at time of publication [2]. 

by Carole VanSickle

Do you think that there is still hope for J.C. Penney? Do you have investments with this company?